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ELLIOTT WAVE ANALYSIS - Latest Market Commentary

Stock Indices

Prior to Sunday’s Greek referendum vote, a common theme can be seen emerging by comparing the Elliott Wave counts of stock indices, currencies, bonds and commodities. Stock indices are vulnerable to a -1.7% to -2.0% spike lower, currencies suggest the US$ dollar will initially trade higher with the Euro dropping around -1c cent, the European Bund futures are set to trade up by 200 ticks and precious metals moving higher before finalising counter-trend upswings. All of these movements represent the final stages of counter-trend patterns that date back to the April/May period### – they are necessary prior to a larger reversal-signature taking place once completed. This suggests the Greek referendum result will be interpreted negatively to begin with, but sentiment gradually coercing a change, resulting in much larger movements once the dust has settled. This is corroborated by two special inclusions in this latest report – an examination of the Greek ATG index and an update of Greek GR10yr bond yields. The Greek ATG index has ironically, just completed a 15-month decline that began from the March ’14 high of 1379.42 ending mid-June at 651.78. A counter-trend upswing has already begun during the last couple of weeks but this is by no means completed – more upside is required from both price and time. Whilst a short-term snap lower could occur following the results of the referendum, any decline would be expected to hold above the June low before resuming higher. This action is synchronising with our Elliott Wave forecasts for U.S. and European indices. The S&P has a short-term downside risk of -1.7% and Europe of -2.8% but then ending counter-trend declines from the April/May highs. These then change direction and head upwards into new higher highs during the next month or two. The main vulnerability remains with Asian indices. These suggest an important high already formed in May/June but are synchronised with Western indices and are expected to undergo counter-trend upswings during the next month or two. 4th July 2015

Financial Updates Currencies

Currencies (FX)

Though the US$ stretched a little bit higher during the latter half of last week, the Euro failed to exceed its equivalent short-term price extremity. This sets up a bearish divergence for the US$ which suggests limited upside potential during the next days – idealised resistance is measured towards 96.91+/- and a reversal is deemed likely from there to enter downside acceleration. From a larger perspective however, the US$ is seen in a multi-month trading range that translates### into an Elliott Wave expanding flat sequence. Thus although we should see a US$ depreciation during the next weeks, two strong support areas are outlined to stall the current downswing in progress from the May high of 97.77 and allow for a significant advance in the following month or two. Meanwhile, Sterling is edging lower and is currently trading at the 1.5600+/- area. Although the larger uptrend is intact, there are some short-term variations. Our preferential scenario depicts more upside to come during the next two weeks prior to a 10-cent downswing as the final leg of a multi-week expanding flat sequence. The alternate route describes the mid-June high of 1.5930 as the completion of the flat’s ‘b’ wave. In this case, the larger downswing would be already underway. We have provided the critical support area in our report to differentiate between these two variations. US$/Yen’s downward bias is evident from the 125.86 high – a series of lower highs is preparing for a pronounced downswing that would confirm the 125.86 high as the completion of several degrees of trend. Basis the Elliott Wave structure however, there is a high probability for a 2nd wave expanding flat sequence which advocates a short-term upside reversal from the 121.24+/- area to be followed by a strong rally. This expected advance must stay below the 125.86 high to guarantee the immediacy of subsequent downside acceleration. A direct continuation below the 121.24+/- area would be an even clearer signal of a major high at 125.86 but the overlapping character of the recent price action assigns a lower probability to this outcome. 4th July 2015

Financial Updates Bonds

Bonds (Interest Rates)

Ahead of Sunday’s Greek debt crisis referendum, Finance Minister Yanis Varoufakis has stated that ‘a deal is almost done’ with European delegates of the Troika. This is a surprise given earlier statements made last weekend from European officials that said there would be no further negotiators until after the referendum vote. Yanis Varoufakis has said that unofficial negotiations have continued though, and it is these that he suggests have been making progress to find a resolution. The referendum will begin in Greece at 7am with results filtering through by 9pm.### Meanwhile, analysis of long-dated yields suggests a negative reaction to the referendum as the coming week begins but this as a temporary phenomenon prior to a larger sentiment change. This report includes our latest Elliott Wave analysis for the Greek GR10yr yield with some interesting results. Meanwhile, the US10yr yield continues a counter-trend decline from the June high of 2.492 with downside targets remaining unchanged towards 2.168+/-. This also suggests additional safe-haven buying of treasury-note futures at the beginning of the coming week. In Europe, our benchmark German DE10yr yield is similarly positioned to continue a counter-trend decline that began from the late-May highs – downside targets remain unchanged towards 0.650-0.550%. 4th July 2015

Commodities

Commodities have generally traded quietly during the last week with modest declines attributed to a steady US$ dollar. Our current analysis suggests the coming week will begin with a stronger US$ dollar but this unfolding as a temporary phenomenon following the Greek referendum result. The currency then stages a reversal signature and begins to decline ###into month-end. It is at this stage that we expect commodities, particularly gold and silver, begin a counter-trend upswing from last week’s lows. Gold has found some support last week at 1156.90 but is now expected to trade back higher inside the range with upside targets during the next week or two towards 1212.60 prior to resuming larger declines. Silver is similarly positioned finding some support around 15.47+/- with short-term upside potential towards 16.48-80+/- prior to staging a final decline that ultimately breaks below last year’s lows of 14.51. Crude oil remained weak into last week’s close as shale production increased along with higher Crude supply. This is pulling prices below the May low at 56.51, changing a counter-trend 4th wave triangle pattern that began from the 62.58 high into a deeper ‘slanting flat’ pattern. Downside targets are towards min. 54.35, max. 53.06+/-. A subsequent 5th wave advance with upside targets to 67.48+/- remains unchanged and will only be negated below overlap at 52.48.. 4th July 2015

LATEST ARTICLES

THE ‘INFLATION-POP’ - PRECIOUS METALS SET TO SURGE INTO RECORD HIGHS

Bloomberg hosted a Precious Metals Forum on 23rd May and WaveTrack International was invited to present our latest Elliott Wave price-forecasts. The event was sponsored by the CME Group and Johnson Matthey.

OUTLOOK & FORECASTS FOR 2013

Highlights:

  • The 2013 outlook for global stock indices and commodities remains very bullish and is entering the last stage of the ‘inflation-pop’ phase that originally began from the post-financial crisis lows of 2008/09
  • This is expected to ignite another period of asset buying that increases risk-on multiples by a minimum 45% per cent and in some cases as much as +300% per cent, sending some global stock indices and commodities into record highs
  • Shorter-term, there is a danger of a downward adjustment of -5-8% per cent, but then sharp price advances to resume
  • Commodity related stock indices and equities are expected to outperform as a sector during the next 12-16 months
  • Banking stocks to participate, but most will not exceed their pre-financial crisis highs

As always, this year’s Outlook & Forecasts for the next twelve months are created applying the Elliott Wave Principle for the assessment of pattern and price amplitude, also Cycle Analysis for the timing of the larger trend reversals. Not always do they jive, but they seldom contradict and more often, provide valuable insights into one or two variations of a similar theme within a seemingly unlimited amount of possibilities.

Even though this report outlines the price expectancy of all asset classes for 2012 it will also illustrate how this coming year fits together into the larger picture. The reasoning behind this is to move away from the 'black-box' stereotype and show you why the results relate to their specific outcome. Overall, this report deals with two different time-periods – long-term and inter-mediate term. Long-term refers to the uptrends from the Great Depression of 1932 onwards and inter-mediate term for the coming year and into 2013.

HOW TO INTERPRET EACH ELLIOTT WAVE CHART

What do you see when looking at an Elliott Wave chart? Just lots of numbers & letters overlaying the price data? – or do you see definable patterns that are immediately familiar? And how do you interpret the results of the analysis and put it into an effective trading plan? Read on and test your own knowledge of these subjects and much more...

A COMMODITY SUPER-CYCLE?

Recent reports of a Commodity Super-Cycle grabbed my attention for two reasons – first, this is diametrically different to the outlook I foresee developing during the next decade, and second, this terminology has surfaced at a time when various commodities have already undergone large percentage gains measured from the Feb.'09 lows

THE 'DEFLATIONARY SCENARIO'

The primary theme of this presentation focuses on a 'Deflationary' outlook, forecast as the dominant aspect continuing during the next decade. This is derived from analysing the Elliott Wave pattern structure of the CRB (Cash) Index during its expansionary period of the last 76 years.

THE 'FLASH CRASH'

The Update Alert! messaging service of EW-Forecast Plus responded to the sharp collapse and the following recovery of US stock indices during the volatile trading session on the 6th May.

OUTLOOK FORECASTS FOR 2011

This analysis centres around the S&P 500 that is used as a proxy for other global indices. The great bull market beginning from the 1932 low ends 68 years later in 2000 - other global indices peaked later in 2007 (75yrs) – some still continuing to progress.

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"I just wanted to congratulate you on the EW-Compass reports launch. I'd say all the work you've all put into this project is well worth it… never cease to be amazed by the harmony that you find between the fib relations you highlight and the Elliott count you propose. You are a true descendant of RNE, and I'm quite sure he'd have really loved to see your work… Another aspect that sets you apart is your deep knowledge of the how and why of pattern relationships between higher & lower degrees of the same price action. So much to learn there". - T.S.

ELLIOTT WAVE PATTERN

INTRODUCTION TO THE WAVE PRINCIPLE

The Wave Principle, often referred to as Elliott Wave is a unique methodology that applies Natures Laws, those encompassing the Natural Sciences and Universal Geometric Philosophies to the financial markets. It allows us to view price fluctuations as an organised process that can be non-linearly extrapolated to gain a glimpse into the future direction of trends, counter-trends and amplitudes on any market or contract traded around the world.

Expanding Diagonal Patterns - Do they actually exist? - Elliott's inclusion of the Contracting Diagonal

In R.N.Elliott's original treatise of "The Wave Principle (1938)", he introduces us to diagonal patterns for the first time on page 21. Under the heading, Triangles, Elliott describes the difference between horizontal triangles that represent hesitation within an ongoing, progressive trend and diagonal triangles that form the concluding 5th wave of a larger five wave sequence.

NEWS & EVENTS

Tradersworld Online Expo #12 – Starts 12th November 2012

Peter Goodburn will be presenting his latest Elliott Wave analysis at the 12th Trader Expo held online for 7 weeks starting on 12th November 2012 and ending in the new year on 6th January 2013. Peter’s presentation is entitled “Elliott Wave Price Forecasts & Cycle Projections – Three Phases of the 18 Year Bear Market ~ ‘Shock–Pop–Drop’” for more information visit http://tradersworldonlineexpo.com/

Announcement: 123rd Battery Council & Trade Fair Convention in Miami, 1-4 May 2011

Peter Goodburn will be presenting his latest Elliott Wave analysis at the 123rd Trade Fair Convention of the Battery Council in Miami, 1-4 May 2011. Peter’s presentation is entitled "The Historical Price Trend of Lead and Applying the Elliott Wave Principle to plot its course into the Future".

ELLIOTT WAVE PRICE-FORECAST UPDATES